Real estate refund; Attorneys point out mistake

It's the money mistake thousands of Michigan homeowners have probably made when selling their homes.

Michigan has something called the State Real Estate Transfer Tax. The seller pays .75 percent of the sales price when the deal closes. Ruth to the Rescue spoke to a Macomb County resident who was surprised to learn he paid the tax, when he was actually exempt.

"Initially, I was definitely disappointed that there was a mistake that I overpaid," the homeowner, Brian, told Ruth to the Rescue.

Mistakes Uncovered

Attorneys at 1-800-LAW-FIRM contacted Brian after public records showed he paid that tax. The law firm's CEO Ari Kresch says it's helping hundreds of people in similar situations.

"This tax is calculated and nobody pays attention to the exemption probably because they were never trained, they don't care, it's not their money," Ari Kresch told Ruth to the Rescue.

He says it's probably nothing that happens on purpose, but it something that falls through the cracks during the sale.

While there are other reasons for homeowners to be exempt, Kresch says homeowners like Brian are exempt when they sell their homes for less than they paid for it. Brian says he paid about $307,000 for his home, and later sold it for $250,000. He received a refund of around $1,000. The firm did charge a contingency fee for helping Brian.

"This is a widespread practice, people need to know about it," said Ari Kresch. "The state of Michigan has been very very cooperative in refunding our clients' money. It wasn't their fault."

Get Refunds Online

Michigan's Department of Treasury agrees with that assessment, and also points out, you don't need an attorney or third party to claim any refund. There is information about who qualifies for exemptions from the real estate transfer tax. There is also a form to start the process of claiming that refund. If the form and the proper documentation is submitted, you will receive the refund you're due.

The homeowner we spoke to says the whole experience taught him to ask questions about every expense when selling or buying a home.

"Do all the homework myself, make sure that everybody that is working for me, is indeed working for me," Brian told Ruth to the Rescue.